Debt and default under the Insolvency Code: procedural objections and foreign-law loan documents did not block admission.

A duly executed and sufficiently broad bank authorisation was accepted for filing a Section 7 insolvency petition, and the objection to the power of attorney failed. Pending appeal in a winding-up matter, Joint Lenders Forum proceedings, and RBI guidelines did not bar maintainability, as they could not override the Code. Objections based on stamping defects and the form of bank account evidence were also rejected. An external commercial borrowing agreement governed by English law did not oust Indian insolvency jurisdiction over the corporate debtor. Debt and default were established on the record, so the petition was admitted and moratorium followed.

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Issues: (i) Whether the power of attorney authorising the filing of the insolvency petition was valid; (ii) whether the pending appeal against dismissal of the winding-up petition, the Joint Lenders Forum, and the Reserve Bank of India guidelines affected maintainability; (iii) whether the facility agreements were inadmissible for want of proper stamping and whether the statement of account satisfied the evidentiary requirement; (iv) whether the Insolvency and Bankruptcy Code could be invoked in respect of an external commercial borrowing agreement governed by English law; and (v) whether the financial creditors had established debt and default so as to justify admission under Section 7.

Issue (i): Whether the power of attorney authorising the filing of the insolvency petition was valid.

Analysis: The authority was executed by the bank itself with its seal and expressly empowered the officer to commence and carry on insolvency proceedings. The challenge was held to be hyper-technical, particularly when the corporate debtor did not dispute the debt or default and no material showed that the bank itself questioned the authorisation. The form used for filing under the Code was treated as wide enough to include a duly constituted attorney.

Conclusion: The power of attorney was held valid and the objection was rejected.

Issue (ii): Whether the pending appeal against dismissal of the winding-up petition, the Joint Lenders Forum, and the Reserve Bank of India guidelines affected maintainability.

Analysis: A pending appeal against dismissal of a winding-up petition was not treated as a pending winding-up proceeding. The Court held that parallel proceedings are not barred merely because one matter is under appeal, and that the Joint Lenders Forum and the Reserve Bank of India circulars were only regulatory or consultative mechanisms that could not override the statutory remedy under the Code. The larger-reference issue concerning pendency of winding-up proceedings was held inapplicable because no winding-up petition was pending.

Conclusion: These objections were rejected and did not bar admission of the petition.

Issue (iii): Whether the facility agreements were inadmissible for want of proper stamping and whether the statement of account satisfied the evidentiary requirement.

Analysis: The objection on stamp duty was found vague because the corporate debtor did not identify the precise deficit or demonstrate why the agreements could not be looked at. The Court held that the agreements had been acted upon and that the asserted defect was not enough to defeat the petition. As to the bank statement, the requirement in Form I was satisfied by filing copies of banker's books, and a separate certified copy was not treated as mandatory for maintainability.

Conclusion: The stamping and bank-statement objections were rejected.

Issue (iv): Whether the Insolvency and Bankruptcy Code could be invoked in respect of an external commercial borrowing agreement governed by English law.

Analysis: The Court held that the fact that the borrowing documentation was governed by English law did not oust Indian insolvency jurisdiction over a company situated in India. The relevant question was where the corporate debtor was amenable to proceedings under the Code, and that jurisdiction was found to exist before the Tribunal.

Conclusion: The jurisdictional objection was rejected.

Issue (v): Whether the financial creditors had established debt and default so as to justify admission under Section 7.

Analysis: The corporate debtor had not disputed the borrowing, the novation, the outstanding amounts, or the defaults. The record contained facility agreements, security documents, acknowledgements, correspondence, and account statements showing continuing default. In the absence of a sustainable defence, the burden on the petitioners stood discharged and the petition was fit for admission.

Conclusion: Debt and default were proved, and the petitions were admitted under Section 7.

Final Conclusion: The insolvency applications were allowed, moratorium followed, and an interim resolution professional was appointed for commencement of the corporate insolvency resolution process.

Ratio Decidendi: A duly executed and sufficiently broad authorisation by the creditor bank is valid for filing a Section 7 application, and once debt and default are established, procedural objections such as pending appeal, JLF proceedings, RBI guidelines, stamping disputes, or foreign-governed borrowing documents do not prevent admission under the Insolvency and Bankruptcy Code.

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